What Is Coin Currency?
Coin currency is a disk of metal or, sometimes, other material (such as paper) that is used to represent a specific value. Unlike other forms of money, coins are not necessarily backed by precious metals; instead, they are considered to have a legal value established by law that is equal to their metallic content. Coins are typically used in trade and may be accepted as a substitute for bills, notes or other types of payment. They can also serve as a store of value and some are designed to be used to participate in software programs.
Historically, coins have been based on a variety of materials, including gold, silver, copper and bronze. In modern times, coins are usually made of a base metal such as nickel, zinc or aluminum. In some cases, a coin may be made of pure metal, although this is rare for currencies in general use. The coins that are most commonly used in international commerce are minted as fiat money, which means that the value of the coin is not backed by any amount of the precious metal it contains. This is a similar practice to that of paper currency, which is not backed by the physical properties of the paper it is printed on.
The values of coins vary greatly, depending on their condition, specific historical significance, rarity, quality, beauty of design and popularity with collectors. The value of bullion coins is also influenced by these factors, but generally not to the same degree as those of coinage. For example, a one-cent coin in the United States has been in circulation since 1856 but, as the price of copper rose, it became worth more for its metal content than its face value.
Monarchs and other coining authorities have sometimes reduced the intrinsic value of coins by replacing a small portion of their precious metal content with a less valuable material. This is called debasement, and it can be done for a number of reasons, from increasing the quantity of coins that can be created to allowing people to profit from the difference between the coin’s face value and its metallic content.
In the past, many of the precious metals that were used in coins were traded across international borders. For instance, finds of Athenian coins in the Levant and Corinthian silver in Magna Graecia (southern Italy) are evidence of well-established trade links.
If you have a lot of spare change collecting dust in your wallet, cashing them in can be an excellent way to treat yourself or add to a savings account with a high interest rate. Most banks will accept spare coins, but it is best to call ahead to find out the specific policy for each branch. In some cases, they may require you to bring in large quantities of the same type and denomination to be able to process your request. Alternatively, some coin-counting machines offer the option to exchange your spare change for gift cards.